$20 billion cash outflow for URA over next five years on urban renewal programmes
The Urban Renewal Authority (URA) plans to spend an estimated $20 billion over the next five years, mainly on its core businesses, namely urban redevelopment and building rehabilitation, and some revitalisation/preservation projects.
Briefing the media today (Tuesday) on the URA's Five-year Corporate Plan of 2011-2016, the Authority's Chairman, Mr Barry Cheung, said: "Over the next five years, we shall strengthen and expand our scope of work in respect of development modes and rehabilitation with a view to speeding up our urban renewal efforts and deal effectively with the problem of urban decay."
"We intend to implement 10 URA-initiated redevelopment projects in the five- year period. The URA would also undertake each year one or two demand-led projects for owners who initiate redevelopment, as well as one or two projects for which the URA would act as facilitator in order to help owners. Provision of more small-unit residential flats is also our objective."
On building rehabilitation, Mr Cheung said the URA earmarks to invest more than $1.3 billion to carry out different schemes to help owners rehabilitate their homes -- numbering 89,000 units in about 2,600 buildings.
He also said the geographical coverage of building rehabilitation would be expanded in two phases. "In 2013-14, our work will cover all districts in Kowloon, and it will then be extended to all of Hong Kong by 2015-2016."
On flat supply, Mr Cheung estimated that in the coming five years, the URA would be able to provide 3,400 residential flats, 50 per cent of which would be 500 square feet of saleable area and below in size.
"We will also set up Urban Renewal Resource Centres in several districts to provide one-stop service for residents who need assistance in urban renewal. The first centre will be established in Tai Kok Tsui in 2011-2012," he said.
Mr Cheung reaffirmed the URA's commitment to undertake the redevelopment projects in diverse modes while expanding the scope of building rehabilitation under the new Urban Renewal Strategy (URS).
"Over the years, the Authority has sought to be responsive to the community's changing aspirations and expectations, and we have adopted new thinking and pursued fresh initiatives. We have also enhanced our policies and measures wherever practicable in order to achieve a balance between the needs of the residents and the resources of the community," he said.
In reviewing the URA's work, Mr Cheung said the URA has so far implemented some 50 projects that have helped some 30,000 families previously living in substandard housing, and improved their living environment. Upon completion, these projects will provide some 19,000 new flats, about 490,000m² of commercial space, approximately 74,000 m² of GIC facilities, over 120,000m² for other uses, including offices and hotels, and over 37,000m² of open space.
He highlighted nine URA initiatives over the past year:
- Carried out a comprehensive building condition survey of some 3,000 buildings which provides up-to-date data for our assessment and projection as well as enabling us to form the basis for reference of our work;
- Implemented a flat-for-flat option for domestic owner-occupiers who will be affected by new projects launched after 24 February 2011;
- Took on the role of a facilitator in accordance with the new URS, helping owners to assemble their property interests for sale;
- Provided a demand-led project framework for owners who wish to initiate redevelopment by themselves;
- Implemented the Ma Tau Wai Road project with special measures that provided immediate relief to residents who wished to move out prior to project approval by the Government;
- Provided a one-stop service for property owners with an integrated building maintenance assistance scheme in conjunction with the Housing Society;
- Launched a promotional scheme to revitalise the street market in the vicinity of URA's Graham Street project;
- Proposed an alternate concept for conserving Wing Lee Street while at the same time providing a series of special measures to assist tenants and owners to improve their living environment;
- Extensively engaged the community in terms of the design concept and the way forward for the revitalisation of Central Oasis.
Also speaking at the media briefing, URA's Managing Director, Mr Quinn Law, said the Authority has recorded an operating surplus of $2.2 billion for the year ended 31 March 2011.
Mr Law commented that there had been two main reasons attributable to the URA's accumulated surplus. First, the URA is exempt by the Government from the need to pay land premium. As at 31 March 2011, the total amount of land premium for URA's tendered projects foregone by the Government was 5.4 billion. If this amount were taken into account, the total accumulated surplus of the URA would only be $3.8 billion.
Second, the URA has benefitted from the rising property market over the past 10 years. Some projects with an estimated deficit upon their commencement have ultimately improved their results positively.
Mr Law cautioned that due to the lengthy development process, the URA, as a 'buyer-and-seller' in redevelopment process from time to time, has to face uncertainties and risks associated with market changes and price fluctuations.
"Any surpluses earned by the URA from its operation are retained and then applied to finance further redevelopment projects and its rehabilitation, revitalisation and preservation efforts. While all of the latter three urban renewal programmes improve the quality of the housing and the built environment in dilapidated urban areas, they are not revenue/surplus generating," said Mr Law.
These projects include the Central Oasis, Pak Tze Lane, Mallory Street Art Community, preservation of shophouses at Prince Edward Road West and Shanghai Street, and building rehabilitation, he noted.
Faced with a volatile property market, the URA has estimated that its acquisition cost commitment for commenced projects as at 31 March 2011 is about $12.8 billion.
Mr Law added: "To ensure that the urban renewal programme of the URA is sustainable in the long term, we will continue to maintain a very prudent financial position and exercise due care and diligence in handling its finances."
- ENDS -